EM ASIA CREDIT: Cikarang Listrindo (CIKLIS, Ba1/BBB-/NR) 10y $350m Mandate - FV
Cikarang Listrindo (CIKLIS, Ba1/BBB-/NR)
"*MANDATE: CIKARANG LISTRINDO UP TO $350M 144A/REGS SENIOR NOTES" - BBG
Mandate: 10yr $300m
FV: z+205bp, T+165bp
The Indonesian power company, Cikarang Listrindo, has mandated banks on a new 10y $350m deal, which is expected to launch next week. The proceeds, along with cash on hand, will be used to refinance the $500m 9/26 bond which is callable in march.
Cikarang Listrindo was upgraded to investment grade by S&P (BBB-) last week, and the expectation is that Moody's will do the same soon after the refinancing is complete. The rating at Moody's is currently Ba1, watch positive. The Moody's upgrade will make the new deal IG index eligible.
In terms of fair value for the mandate, we take into consideration Indonesian state owned electricity producer, Perusahaan Perseroan (PLNIJ Baa2/BBB); Star Energy Geothermal (STENGE, Baa3/BBB-), Indonesia's largest geothermal energy producer; and Indofoods (Baa2/BBB- pos.), Indonesia's largest food processing company. We also include the Indonesia (INDON, Baa2/BBB/BBB) $ government bonds to confirm the shape of the curve.
We think that Cikarang Listrindoa, a low BBB, privately owned company, will trade around 60bp wide of the Indonesia curve at the 10yr point, more or less in line with STENGE, also a low BBB energy producer. FV therefore Z+205bp, T+165bp.
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